UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
December 22, 2004
CHEMED CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-8351 31-0791746
State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation) Number)
2600 Chemed Center, 255 East 5th Street, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(513) 762-6900
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Item 2.05 Costs Associated with Exit or Disposal Activities.
On December 22, 2004, the Board of Directors of Chemed Corporation
("Company") authorized the discontinuance of the operations of the
Company's Service America segment through an asset sale to employees of
Service America. The disposal is subject to certain regulatory and
other approvals and is expected to be completed during the first half
of 2005.
Our decision to dispose of Service America, which provides
major-appliance and heating/air conditioning repair, maintenance and
replacement services, is based on declining operating results and
projected operating losses:
- Net service revenues declined from $74.2 million for the
year ended December 31, 2000 to $48.1 million for the year
ended December 31, 2003. Service revenues for the year ended
December 31, 2004 are projected to decline to $38.8 million.
- Service America recorded net losses in each of the last
three years and is projected to record net losses for 2004
and beyond.
The acquiring corporation will purchase a substantial majority of
Service America's assets in exchange for assuming substantially all of
Service America's liabilities. Included in the assets to be acquired is
a receivable from the Company for approximately $4.9 million. The
Company will pay $1 million of this receivable upon closing and the
remainder over the following year in 11 equal monthly installments. The
amount of this receivable is subject to adjustment for changes in
Service America's balance sheet through the date of closing.
In connection with the disposal, we estimate that we will record
the following pretax costs and expenses during the fourth quarter of
2004 (in millions):
Asset impairment charges $ 3.4
Employee termination costs 1.8
Professional fees 1.4
Other .5
-----
Total $ 7.1
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The timing of expected pretax cash outflows from the disposal of
Service America, is summarized as follows (in millions):
2005 $ 5.7
2006 1.5
2007 .1
-----
Total $ 7.3
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The timing of expected cash inflows from income tax benefits
related to the disposal of Service America, is summarized as follows
(in millions):
2005 $14.4
2006 .1
2007 .1
-----
Total $14.6
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHEMED CORPORATION
Dated: December 29, 2004 By: /s/ Arthur V. Tucker, Jr.
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Arthur V. Tucker, Jr.
Vice President and Controller
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